"Cash only" jobs.

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#1493255 16-Feb-2016 14:32

SheriffNZ:

I always thought the cash price was to ensure the vendor received the cash then and there, rather than delayed via the purchaser sorting out finance or putting it on a credit card. I have no problem paying someone cash for a job and discounting a payment for cash, but they still need to give me a GST invoice.

They still need to give an invoice, true. so thats moot as to cost saving. You would get the cash now, instead of next week or two weeks, so thats a HUUUGE discount to reduce the price by 20% to save a week or more interest. No, its to bypass tax, save paying 30 or 33% tax, and GST and give you the customer 20% of that back

frankv

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#1493262 16-Feb-2016 14:36

dejadeadnz:

tripp:

You're not the only one.

I know someone that gets paid in cash for the work he does (He works for himself) yet has no company setup and I don't think the person is bright enough to work out income tax/GST etc and has done things like this before.

Just does what he does, gets paid in cash and repeat.

I can't report him as I have no proof he is doing what I think he is doing.

I often hear dodgers claim that they don't know how to regularise their affairs. That excuse/explanation makes me laugh. One thing I find amazing is how so many small business operators seem to believe that they have some God-given right to avoid the costs that other people incur, e.g. paying for professional advice.

There's equally no God-given requirement to pay for expensive advice which is of little value.

SheriffNZ

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#1493265 16-Feb-2016 14:38

tdgeek:

SheriffNZ:

I always thought the cash price was to ensure the vendor received the cash then and there, rather than delayed via the purchaser sorting out finance or putting it on a credit card. I have no problem paying someone cash for a job and discounting a payment for cash, but they still need to give me a GST invoice.

They still need to give an invoice, true. so thats moot as to cost saving. You would get the cash now, instead of next week or two weeks, so thats a HUUUGE discount to reduce the price by 20% to save a week or more interest. No, its to bypass tax, save paying 30 or 33% tax, and GST and give you the customer 20% of that back

Big discounts - yes, I agree, smaller discounts - I'm not so sure about. The offer of cash is all about the time value of money, or tax avoidance (or both).

SheriffNZ

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#1493266 16-Feb-2016 14:42

frankv:

dejadeadnz:

tripp:

I often hear dodgers claim that they don't know how to regularise their affairs.

There's equally no God-given requirement to pay for expensive advice which is of little value.

If someone doesn't know how to do something for themselves, getting advice on it is probably not going to be of little value. If you think the advice is expensive - shop around until you find something that fits your budget, bearing in mind that you sometimes (definitely not always) pay for what you get.

MikeB4

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#1493278 16-Feb-2016 14:56

frankv:

dejadeadnz:

tripp:

You're not the only one.

I know someone that gets paid in cash for the work he does (He works for himself) yet has no company setup and I don't think the person is bright enough to work out income tax/GST etc and has done things like this before.

Just does what he does, gets paid in cash and repeat.

I can't report him as I have no proof he is doing what I think he is doing.

I often hear dodgers claim that they don't know how to regularise their affairs. That excuse/explanation makes me laugh. One thing I find amazing is how so many small business operators seem to believe that they have some God-given right to avoid the costs that other people incur, e.g. paying for professional advice.

There's equally no God-given requirement to pay for expensive advice which is of little value.

If the advise is sought and asked for and time given then yes it should be paid for. One may not always agree with the answers one receives but if you ask then pay.

andrew027

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#1493342 16-Feb-2016 16:34

I'm always open to getting a cheaper price for something, and if someone offers me a good deal if I pay cash I'll usually do it, but as others have said I still want an itemised invoice showing all the parts used, work done, etc. There may be some costs I can claim on my tax, or insurance, etc. so I need proof ow work done. And I try not to break the law, and I won't help someone else do it either.

mattwnz

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#1493349 16-Feb-2016 16:42

The problem reporting someone is unless you have recorded them saying it, it is there word against yours. Surprised that so many professional tradies would do cashies these days. It basically means less money for health, education , public services, roads etc.

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mattwnz

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#1493353 16-Feb-2016 16:44

andrew027:

I'm always open to getting a cheaper price for something, and if someone offers me a good deal if I pay cash I'll usually do it, but as others have said I still want an itemised invoice showing all the parts used, work done, etc. There may be some costs I can claim on my tax, or insurance, etc. so I need proof ow work done. And I try not to break the law, and I won't help someone else do it either.

But you can't claim back say gst on work done, if they haven't paid gst themselves. Otherwise you are getting back tax that was never paid in the first place. To claim back GST, you usually have to have a tax invoice showing the GST paid.

SheriffNZ

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#1493357 16-Feb-2016 16:53

mattwnz:

andrew027:

I'm always open to getting a cheaper price for something, and if someone offers me a good deal if I pay cash I'll usually do it, but as others have said I still want an itemised invoice showing all the parts used, work done, etc. There may be some costs I can claim on my tax, or insurance, etc. so I need proof ow work done. And I try not to break the law, and I won't help someone else do it either.

But you can't claim back say gst on work done, if they haven't paid gst themselves. Otherwise you are getting back tax that was never paid in the first place. To claim back GST, you usually have to have a tax invoice showing the GST paid.

I'll rephrase "To claim back GST, you have to have a tax invoice showing the GST to be paid." While the GST on invoices good tax paying citizens pay should be paid to the IRD (less any GST they paid on their expenses), in far too many cases, this doesn't happen.

http://www.ird.govt.nz/aboutir/external-stats/debt/overdue-debt-tax-type/overdue-debt-tax-type.html

macuser

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#1493367 16-Feb-2016 17:37

Inversely, expect higher 20-30% prices if all work goes through the books...

All they're doing is discounting you the portion that would be paid to IRD.

Linuxluver

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#1493371 16-Feb-2016 17:54

Hammerer:

Linuxluver:

timmmay:

I wouldn't call that corruption, I'd call it tax avoidance or evasion. Quite different. Corruption is someone in power asking for a bribe, he just gave you an option.

It's a conspiracy to break the law.

That's corruption. But it is interesting people do try to draw some sort of distinction between the two. But it really boils down to "My corruption is OK, but theirs isn't". It's all illegal....and we all end up paying for it in higher taxes or a lower level of services.

timmay is correct. Corruption has a very specific definition. "Lawlessness", "outlawry" and "illegality" are all better terms for your statement, e.g. "My lawlessness is OK, but theirs isn't."

I appreciate there is strict legal language....and that there is a common usage meaning for the word "corrupt" that does correctly describe anyone as "corrupt": "having or showing a willingness to act dishonestly in return for money or personal gain."

Exactly what I'm talking about. Google it.

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Linuxluver

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#1493372 16-Feb-2016 17:55

macuser:

Inversely, expect higher 20-30% prices if all work goes through the books...

All they're doing is discounting you the portion that would be paid to IRD.

That's not all they are doing. They are also putting that income outside their taxable income. So it isn't just the GST.....it's the income tax as well.

People rorting their taxes costs us all in the end.

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Linuxluver

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#1493374 16-Feb-2016 17:58

mattwnz:

The problem reporting someone is unless you have recorded them saying it, it is there word against yours. Surprised that so many professional tradies would do cashies these days. It basically means less money for health, education , public services, roads etc.

You can anonymously report them to the IRD. The IRD can then audit them and get access to their bank accounts. They can even estimate the likely cost of the lifestyle the person is living if the meagre amount passing through the bank account can't be aligned with the 5 bedroom house and the four cars and the month in Europe.

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tdgeek

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#1493535 17-Feb-2016 00:32

Linuxluver:

mattwnz:

The problem reporting someone is unless you have recorded them saying it, it is there word against yours. Surprised that so many professional tradies would do cashies these days. It basically means less money for health, education , public services, roads etc.

You can anonymously report them to the IRD. The IRD can then audit them and get access to their bank accounts. They can even estimate the likely cost of the lifestyle the person is living if the meagre amount passing through the bank account can't be aligned with the 5 bedroom house and the four cars and the month in Europe.

yep, as i implied in a previous post. assets and liabilities can be audited, = gross income.

Geektastic

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#1493918 17-Feb-2016 12:18

tdgeek:

Geektastic:

Linuxluver:

timmmay:

I wouldn't call that corruption, I'd call it tax avoidance or evasion. Quite different. Corruption is someone in power asking for a bribe, he just gave you an option.

It's a conspiracy to break the law.

That's corruption. But it is interesting people do try to draw some sort of distinction between the two. But it really boils down to "My corruption is OK, but theirs isn't". It's all illegal....and we all end up paying for it in higher taxes or a lower level of services.

Well, when you say "we all" you presumably mean "the minority of taxpayers in NZ who are net payers rather than net recipients" because that number is actually fairly small as a percentage.

LL means taxpayers, thats everyone that earns an income. Whoever pays tax pays NZ's bills. If less tax is collected, tax rates must rise or the services must reduce

However if you are receiving more back than you put in you are not really a taxpayer, are you? See this exchange from Parliament:

Michael Woodhouse: Which groups now pay most of the tax collected by the Government?

Hon BILL ENGLISH: Our tax and transfer system is highly redistributive, and the number of people paying income tax is surprisingly small. The lowest-income 43 percent of households currently receive more in income support than they pay in income tax. The 1.3 million households with incomes under $110,000 a year collectively pay no net tax—that is, their total income support payments match their combined income tax. The top 10 percent of households contribute over 70 percent of income tax, net of transfers—over 70 percent of income tax, net of transfers. This system is highly redistributive and we believe it is fair.

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